Never for intraday use of cash. And, yes, GS charges haircut... as do all firms that I know of....if you know of someone who doesn't, please let me know, LOL..
Don
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Starting a Hedge Fund
- Thread starter ktm
- Start date
Never for intraday use of cash. And, yes, GS charges haircut... as do all firms that I know of....if you know of someone who doesn't, please let me know, LOL..
Don
Quote from Cluseau:
I was directed to this thread by a friend. He told me there is an injustice that needed fixing.
A good trader needs a prop firm like a two bit hooker needs advice from a cop on how to get tricks. It's funny Don 'PROPaganda' stepped in to gloat about 'his prop firm' and 'his way' when the subject matter has nothing to do with him, his firm, or his experience. The card player sure knows how to bluff. No one cares about the crack addicts you employ or the calls you get or your selection process; anyone with $5000 grand.
To answer Don's stupid assumption, we manage OPM because we can and it feels right. You know, giving back instead of hiring stool pigeons to work at a so-called PROPaganda firm. I'm surprised no one has taken Don out yet but i suppose all of the alter offerings and misinformation you spew keep your pimps happy and rich.
We'll say a prayer for you and your brother. Amen.
Let me know how the process unfolds for starting your Hedge Fund partnership....very interested. Thanks.
Thanks for posting. I agree 100%. It is so amazing how quickly this thread manages to derail into a prop propaganda! I posted here to discuss the best legal structure for the hedge fund and the support stucture to go with it from those who are going along that path.
I look forward to hear about Prime Broker options for small funds starting with about 4-5MM -- or if a fund starts w/o a Prime Broker, is there any notable disadvantages?
Thx
Oh...ok...I see
I thought there may have been some mistake..... wasn't sure.
BTW: So all the Pairs Trades are getting hit with haircut fees?
I thought there may have been some mistake..... wasn't sure.
BTW: So all the Pairs Trades are getting hit with haircut fees?
Quote from Don Bright:
Never for intraday use of cash. And, yes, GS charges haircut... as do all firms that I know of....if you know of someone who doesn't, please let me know, LOL..
Don
Your problem is AUM.
Put off the PB and Administrator and Auditor until your AUM are sufficient to handle the considerable drag.
Under almost all circumstances youâd be better off with OPM in a Reg-T account. That is until yous get large
Put off the PB and Administrator and Auditor until your AUM are sufficient to handle the considerable drag.
Under almost all circumstances youâd be better off with OPM in a Reg-T account. That is until yous get large
Quote from lynx2004:
Thanks for posting. I agree 100%. It is so amazing how quickly this thread manages to derail into a prop propaganda! I posted here to discuss the best legal structure for the hedge fund and the support stucture to go with it from those who are going along that path.
I look forward to hear about Prime Broker options for small funds starting with about 4-5MM -- or if a fund starts w/o a Prime Broker, is there any notable disadvantages?
Thx
Quote from Dr. Zhivodka:
Oh...ok...I see
I thought there may have been some mistake..... wasn't sure.
BTW: So all the Pairs Trades are getting hit with haircut fees?
As far as pairs traders, some use excess capital, some don't... it all depends on their personal trading plan. Judging by the influx of new Bright traders, there's quite a number who are happy to have access to the money....(any business person who can make 10X by paying 1X for capital, will likely do so)....and we're glad to help, of course.
(Just to point out, it's much better to pay a few points for capital than to give away 80%, IMHO). But, to each his own.
All the best,
Don
Quote from ktm:
I had hoped this wouldn't turn into another one of Don's threads espousing all the many benefits of prop firms. As I've said on other threads in the past, I have nothing against prop firms and those who trade with them and I fully support those of you who choose to go that route.
To compare a hedge fund with someone trading at a prop firm is a real stretch to be nice about it.
This is from page two of this thread. I wrote this 4 years ago and it still applies today. This thread was created as I was starting my firm - the purpose being to communicate with others who knew the business. This thread isn't about me, but since the legitimacy of starting small has been questioned repeatedly, maybe it's time I provide an update since so much time has passed.
Originally, I was asked to go in with a partner who was more of a financial advisor than money manager. That didn't work out and I started my own firm several years ago.
The experience has been very rewarding. My firm is successful well beyond my expectations, with last years performance being in about the 5th percentile of funds listed in the major databases. We have added clients and increased AUM exponentially. This is not some "friends and family" venture thrown together as a hobby. None of my clients are relatives or friends from anywhere except through the business. I spent nearly 18 months and many tens of thousands on legal, accounting and other setup to get this going. I still spend an annual fortune on audits, legal, accounting and regulatory upkeep...and I wouldn't trade it for any other job in the world.
Just because I don't have a Wall St pedigree and didn't raise 500M out of the gate doesn't make my (or any other) fund less legitimate. I could cite many who have started very very small and grown to 9 figures or more with hard work and solid performance.
This is NOT a debate about prop vs. hedge fund. There is an entire section of threads on this site for prop trading that has Don's firm clearly flashing as the sponsor. I would guess that there aren't HF guys going into the prop threads accosting prop guys over there and I would hope we can keep this thread on topic going forward.
Thanks
ktm
Some do some don't ....ok.
Questions please:
1) The ones that do use SLK's money overnight get whacked for haircut charges....yes?
For the budding manager, would you advise bringing OPM into a JBO type of account such as the one that Bright administers?
2) I'm curious about the ones who don't use SLK's money overnight in a pairs trade.
Those accounts then must capitalized sufficiently (1:1) to carry those trades....yes? How much would you estimate those accounts would have to be funded for to make a decent living trading pairs... 500K....1mil...more?
Thx
Questions please:
1) The ones that do use SLK's money overnight get whacked for haircut charges....yes?
For the budding manager, would you advise bringing OPM into a JBO type of account such as the one that Bright administers?
2) I'm curious about the ones who don't use SLK's money overnight in a pairs trade.
Those accounts then must capitalized sufficiently (1:1) to carry those trades....yes? How much would you estimate those accounts would have to be funded for to make a decent living trading pairs... 500K....1mil...more?
Thx
Quote from Don Bright:
As far as pairs traders, some use excess capital, some don't... it all depends on their personal trading plan. Judging by the influx of new Bright traders, there's quite a number who are happy to have access to the money....(any business person who can make 10X by paying 1X for capital, will likely do so)....and we're glad to help, of course.
(Just to point out, it's much better to pay a few points for capital than to give away 80%, IMHO). But, to each his own.
All the best,
Don
Congrats man.
Nice job.
Nice job.
Quote from ktm:
This is from page two of this thread. I wrote this 4 years ago and it still applies today. This thread was created as I was starting my firm - the purpose being to communicate with others who knew the business. This thread isn't about me, but since the legitimacy of starting small has been questioned repeatedly, maybe it's time I provide an update since so much time has passed.
Originally, I was asked to go in with a partner who was more of a financial advisor than money manager. That didn't work out and I started my own firm several years ago.
The experience has been very rewarding. My firm is successful well beyond my expectations, with last years performance being in about the 5th percentile of funds listed in the major databases. We have added clients and increased AUM exponentially. This is not some "friends and family" venture thrown together as a hobby. None of my clients are relatives or friends from anywhere except through the business. I spent nearly 18 months and many tens of thousands on legal, accounting and other setup to get this going. I still spend an annual fortune on audits, legal, accounting and regulatory upkeep...and I wouldn't trade it for any other job in the world.
Just because I don't have a Wall St pedigree and didn't raise 500M out of the gate doesn't make my (or any other) fund less legitimate. I could cite many who have started very very small and grown to 9 figures or more with hard work and solid performance.
This is NOT a debate about prop vs. hedge fund. There is an entire section of threads on this site for prop trading that has Don's firm clearly flashing as the sponsor. I would guess that there aren't HF guys going into the prop threads accosting prop guys over there and I would hope we can keep this thread on topic going forward.
Thanks
ktm
out of curiousity. how much would i need to deposit if i wanted to be long (non hedged, nor short) $20 million in US equities overnight.
thx in advance.
thx in advance.
Quote from Don Bright:
Hmmm? I'm sure that the 500 traders or so who keep positions always, conversions, dozens of sets of pairs, M&A, etc. would be shocked to think that anyone thinks we close out positions every day....
We have hundreds of $millions in use with longer term positions.
Big fallacy about "intraday" trading...we have never stopped our traders from holding stocks.
I will be glad to discuss the various costs and limits you ask about. Hedged is simply dollar long vs. dollar short and you can keep 6 times with no "haircut" and up to 100 times if your trading plan requires it. Our largest growth area in recent months is from traders who need capital in large doses to continue making money, and most firms simply cannot allow it for net capital reasons.
Things change, we adapt, all is well.
All the best,
Don
Help a novice with some of the lingo please.
AUM?
What exactly is a "prime" broker? From what I've read they are the large firms that are experienced working with hedge funds. What advantage is there to using these firms vs. a non-prime broker?
Say I want to start a small investment partnership of 1-2 million. Why would I want to use GS, MS or UBS? What would you get for using these expensive (I assume) firms?
Sorry for the simple Q's but I suspect that many casual lurkers are wondering the same things.
AUM?
What exactly is a "prime" broker? From what I've read they are the large firms that are experienced working with hedge funds. What advantage is there to using these firms vs. a non-prime broker?
Say I want to start a small investment partnership of 1-2 million. Why would I want to use GS, MS or UBS? What would you get for using these expensive (I assume) firms?
Sorry for the simple Q's but I suspect that many casual lurkers are wondering the same things.
Quote from Dr. Zhivodka:
Your problem is AUM.
Put off the PB and Administrator and Auditor until your AUM are sufficient to handle the considerable drag.
Under almost all circumstances youâd be better off with OPM in a Reg-T account. That is until yous get large